South Korea’s Act on the Fairness of Supply Contracts, originally passed to address imbalances between large corporations and their subcontractors, underwent key amendments in 2021 to enhance transparency and accountability across critical sectors—including logistics. The revised law specifically targets freight, warehousing, and related service agreements, aiming to prevent unfair practices such as opaque pricing, hidden surcharges, and discriminatory contract terms. For third-party logistics (3PL) providers operating under these rules, ensuring compliance requires adopting more transparent contracting mechanisms and proactively disclosing pricing structures.
Under the amended Act, 3PL providers must ensure that their freight contracts clearly state all fees, including base rates, fuel surcharges, demurrage charges, and any ancillary costs. The law prohibits the imposition of undisclosed or arbitrary charges after contracts are signed. Importantly, logistics providers are now expected to publish standard rate cards and demurrage policies in a publicly accessible format. This allows clients and subcontractors to verify that agreed terms align with published rates, reducing the risk of disputes and regulatory scrutiny. Failure to comply with these transparency obligations can result in administrative sanctions, including fines and restrictions on government contract eligibility.
To meet the Act’s requirements, logistics providers should first review all existing freight and storage contracts to identify any clauses that could be perceived as vague or unfair. This review process should cover key elements such as rate escalation mechanisms, demurrage and detention charge triggers, and conditions for contract amendments. Providers should work with legal and compliance teams to revise templates and standard terms, ensuring that all cost components are itemized and justified. In parallel, providers must develop comprehensive and accessible rate cards, which detail their pricing for core services—including container transport, warehousing, customs clearance, and last-mile delivery.
Publishing these rate cards and demurrage policies is a critical compliance step. Logistics providers should create a dedicated section on their corporate websites where these documents can be easily accessed. Ideally, the rate cards should be available in machine-readable formats (e.g., CSV, JSON) to facilitate client analysis and integration into procurement systems. Providers may also opt to include explanatory notes and sample calculations to help clients interpret rate structures, enhancing transparency and reducing the likelihood of misunderstandings.
A best practice is to support this disclosure with technical integration—namely, by offering API (Application Programming Interface) feeds of the rate card and demurrage policies. This allows clients to pull updated pricing data directly into their procurement portals and contract management systems, ensuring alignment between negotiated terms and published rates. Developing such an API feed involves several key steps. First, the logistics provider should structure its rate card database in a standardized format, using consistent field names for service types, rates, units of measure, and applicable conditions. Next, the provider should design RESTful API endpoints that deliver this data securely and efficiently, incorporating authentication protocols to control access where necessary. Finally, the API should be documented comprehensively, with example queries and usage guidelines provided to clients and integration partners.
Once the API infrastructure is in place, logistics providers should pilot its integration with a select group of key clients. Feedback from this pilot phase can inform refinements to the API design, data structure, and user support resources. Providers should also consider offering client training or workshops to help procurement teams make full use of the API’s capabilities. Over time, expanding API access to the broader client base will reinforce the provider’s commitment to transparency and facilitate smoother, more efficient contracting relationships.
Beyond technical implementation, logistics providers should establish internal compliance monitoring systems to ensure that published rate cards and demurrage policies remain current and accurate. This involves designating responsibility within the pricing or compliance teams for regular reviews and updates, particularly when market conditions or regulatory frameworks change. Providers should document these review cycles and retain evidence of updates, as regulators may request proof of compliance during inspections or audits.
Transparent rate card publication and API integration can also provide strategic advantages for logistics companies. By demonstrating proactive compliance with the Act on the Fairness of Supply Contracts, providers can strengthen client trust, reduce contract negotiation friction, and differentiate themselves in a competitive market. Moreover, the data-driven transparency enabled by API feeds can help clients optimize their logistics spend and planning, fostering deeper and more collaborative relationships.
The 2021 amendments to South Korea’s Act on the Fairness of Supply Contracts represent a significant regulatory shift for the logistics sector. Third-party logistics providers must not only ensure that their contracts are fair and transparent but also actively disclose standard pricing and demurrage terms in accessible formats. By leveraging modern tools—such as open rate card APIs integrated into client procurement systems—providers can achieve compliance while enhancing their service offerings. As regulators continue to scrutinize supply chain practices, these measures position logistics firms to navigate the evolving landscape with confidence and credibility.